Responding to the state's projected $20 billion deficit, California governor Arnold Schwarzenegger announced during his final State of the State address Wednesday that the California School Boards Association would implement the country's first ever non-monetary pay scale for public school teachers for the upcoming fiscal year.

Effective April 1, the new pay scale will mandate that all California K-12 public school teachers be paid in a salary consisting of compliments and words of encouragement, as opposed to the current mode of teacher compensation: small sums of money, gnome key chains, desiccated coffee cake slabs, and discount coupons to Waldenbooks.

Schwarzenegger, flanked by a coalition of state legislators, district superintendents, school board officials, and representatives from the California State Teacher's Association, assured a leery public that the drastic measure of eliminating monetary payment for teachers is necessary at a time when the state is mired in its worst financial crisis since the Great Depression.

"The simple fact is, no governor ever wants to take money away from teachers," said Schwarzenegger. "On the other hand, you just cannot overestimate the psychological benefits of a hearty slap on the back following a job well done. In fact, I think it can be argued that the big winner here today, other than the children of California, is the morale of its teachers."

According to the state's budget office, the elimination of teacher pay is projected to save California up to $4 billion. In addition, Schwarzenegger and state Republicans have proposed a series of cuts that slash or eliminate health care and social services to the elderly and disabled, as well as to the state's poorest children.

Said state Senate Minority Leader Dennis Hollingsworth, "Right now, everyone in this state is going to have to feel the pain - even the ones who are already in severe pain."

California has the third highest student dropout rate in the nation, trailing only Kentucky and Mississippi. Moreover, due to its overcrowded classrooms, dearth of resources, and extraordinarily high number of at-risk students, the Los Angeles Unified School District - the nation's second largest - has the third highest teacher turnover rate in North America, behind only Tijuana Unified in Baja California and Frozen Tundra Rural Sheet 16 Unified in Nelson Forks, British Columbia.

"We've been struggling for literally hours trying to find an acceptable solution to this pressing issue," said Jack O'Connell, Supt. of Public Education, "and, quite frankly, we ultimately found ourselves limited to three options: Completely overhaul the method of teacher compensation; replace all credentialed teachers with furloughed inmates; or legalize pot, slap a hefty excise tax on it, and eliminate the entire state deficit right this second."

After some intense back room wrangling and arm-twisting, Schwarzenegger convinced state lawmakers to chose the first option. "I'll admit it," said Assembly Majority Leader Alberto Torrico, "I was flat-out star-struck. I told the governor if he could say, just once, 'I eat green berets for breakfast and I'm very hungry,' I'd support any initiative he wants."

The state's new plan calls for teachers to be compensated on a per-compliment basis, with the strongest teachers garnering the most effusive praise.

For example, compliments such as "How do you do it?" "It's people like you that remind me that teachers belong next to angels in heaven," "You're so brave," and "What you're doing is...I just know I couldn't do it" will be reserved for teachers whose students make the greatest leap in test scores. Second-tier teachers, whose students show moderate academic improvement, will receive slightly less fawning compliments, such as "We need people like you," "Keep fighting the good fight," and "Just remember: You're doing a very good thing."

On the other hand, teachers whose students show no quantitative academic improvement will be plucked repeatedly in the crotch by each member of their local school board, strapped naked to a metal folding chair that's been chilled to 12 degrees Fahrenheit, and forced to watch Dangerous Minds on a loop for 72 consecutive hours while subsisting on a diet of lamb broth.

"Even though the teachers' unions make it virtually impossible to dismiss underperforming teachers," said O'Connell, "surprisingly, there's nothing in any union contract that prohibits - or even discourages - crotch-plucking."

Despite its fiscal benefits to the state, however, the new compensation program comes with pressing questions and possible conflicts: For example, critics are left to wonder how teachers will pay for bare necessities such as food, rent, clothing, and electricity.

Officials such as O'Connell and Schwarzenegger, have suggested night jobs such as bartending or custodial work to help pay bills.

Nancy McDowell, a veteran second-grade teacher, has devised a strategy to recoup some - if not most - of her financial losses.

"Whoring," said the 41-year-old from Anaheim, California. "I saw this thing coming a mile away, so I've already got a bunch of johns in the pipeline."

McDowell added that most of her customers are "sort of on the mid-to-lower end of the totem pole," and that unemployed vacuum salesmen, uncircumsized longshoremen, and the occasional Christian televangelist comprise the lion's share of her customers. "Not that I'm complaining," she said.

"I'm 41 with four kids, so let's just say things aren't as upscale down there as one might like them to be," McDowell added, rapidly air-circling her crotch region with her index finger.